INYATSI REPORTED TO COMPETITION COMMISSION: A MISPLACED COMPLAINT
Last week Thursday, November 30, 2023 the Federation of Eswatini Business Community (FESBC) wrote a complaint letter to the Chief Executive Officer (CEO) of the Eswatini Competition Commission.
The letter was titled "INYATSI GROUP DOMINANCE AND UNFAIR COMPETITION TO LOCAL BUSINESSES – REQUEST FOR AN INVESTIGATION". The letter was a culmination of an instruction by members of FESBC to request the Eswatini Competition Commission to urgently conduct an investigation on the Inyatsi Group on “its dominance and acquisition of various companies to the disadvantage of local business community.”
Among other things, the allegations in the letter include, “The dominance of Inyatsi Holdings in almost all the sectors of the economy; namely Meat Industry (SMI Acquisition), Poultry (Umbuluzi Chicken), Mining (Maloma Colliery), Telecommunication (Swazi Mobile), Medical (Clinic Group), Insurance (United Holdings, Lidwala Insurance), Construction (Inyatsi, CA, Infracast), Estate (Nkonyeni Estate), etc.”
Highlighting the basis for the request for investigation, FESBC argues: “Continuous legal non-compliance within the Inyatsi Holdings in the following:
a) Stretching of working hours for employees to work beyond the legislated hours of work.
b) Manipulation of the work permits for foreigners employed from Zambia by the Group.
c) Replacement of Swazi in management position by Zambians, e.g. Mine Manager in Maloma Colliery has been replaced with a foreigner.
d) Lack of Health and Safety compliance in their operations to the detriment of the citizen and local businesses.
e) Non-compliance with Environmental Laws in terms of vibration and impacts to the neighbouring communities in Malindza Quarry, Maloma Colliery shaft 3 cracked houses, etc.
f) Non-Compliance in terms of Construction Industry Council legislation in that they bid for project categories which are far below their categories, putting the local businesses out of business, due to unfair competition.
The abusive use of guns in the Inyatsi House Building, which intimidates our members when they go for meetings to follow-up on payments, contractual issues. The building is aggressively managed by armed private security forces and this is causing an unfair treatment of the local businesses.”
Subsequent to this letter, which has already been received by the Competition Commission, Inyatsi Holdings, through their lawyers, S.V. Mdladla & Associates, wrote to FESBC on Monday 4 December 2023 and demanded that there be a retraction of the contents of the letter by the Organisation.
“The said retraction should be accompanied by an apology and such retraction and apology should be published in all the media houses as well as social media. Our client denies the veracity of the contents of your correspondence and as such, demands that the said retraction and/or apology be attended to and published within 3 (three) days from the date of this letter.
"Should you fail to retract the contents of the letter and make an appropriate apology within the stipulated days hereinabove, our strict instructions are to institute legal action against your Organisation and further institute criminal proceedings against the individual members of the Board whom client believes directs the proceedings of the Board,” reads the letter from S.V. Mdladla & Associates.
Meanwhile, the Eswatini Competition Commission has not pronounced itself comprehensively on the matter. It remains to be seen if it will use this opportunity to give clarity and educate stakeholders and the general public about its operations and the relevant statute.
But there are some obvious defects with the complaint that undermine the very issues the business community is raising. For example, it appears that a significant part, if not everything, of the contents in the FESBC letter is misplaced and should not be directed to the Competition Commission.
For instance, the letter raises labour-related issues that would ordinarily be directed to the Department of Labour while the “Non-Compliance in terms of Construction Industry Council legislation” complaint should be directed to the Construction Industry Council (CIC).
This is true of the complaint on tax that should ordinarily go to the Eswatini Revenue Services. Meanwhile, “non-compliance with Environmental Laws” is an issue that can best be dealt with by the Eswatini Environmental Authority. The “replacement of Swazis in management position by Zambians” is also not a Competition Commission matter.
This looks like a matter that will end up in the Courts of Law, and we await its outcomes. However, it must be understood that not anything “unfair” is an offence to the Competition Act. For instance, if someone does not pay you on time or as per the agreement, you go to a Court of Law and demand your money.
That cannot be a Competition Commission issue. It must always be borne in mind that the Eswatini Competition Commission is a creature of statute.
It was established by the Competition Act of 2007 to provide for the encouragement of competition in eSwatini’s economy by controlling anti-competitive trade practices, mergers and acquisitions, protecting consumer welfare, and providing an institutional mechanism for implementing these objectives.
It monitors, regulates, controls, and prevents acts or behaviours which are likely to adversely affect competition in the country. For instance, all the Inyatsi Holdings mergers and acquisitions were approved by the Commission. At the time of purchase they were found not to have been offensive to the Competition Act.
There is nothing sinister about that. Also, to be in a dominant market position is not illegal; however, abuse of this position to eliminate competition is illegal. In the case of Inyatsi, there is nothing that has been put to the fore that suggests abuse of its dominance.
In short, an entity can be dominant in the market without being against the Competition Act. Dominance in itself is not illegal. The public looks forward to the outcome of the case and how this matter will be resolved.
Caution must be exercised when it comes to matters that have the potential to jeopardize the credibility of our public institutions, in this case, the Competition Commission.
One can only hope that the Commission will properly bring things into perspective and use this opportunity to educate the public about the law and the Commission so that everyone is clear.
We call upon the Commission to immediately call a press conference to address this matter once and for all. As we see it, this is a misplaced complaint, which might be a consequence of frustration or something else.
We may not know the truth until there are facts presented to the relevant institutions, but what we know for sure is that these are not matters that should be brought before the Competition Commission.